How many funds will beat the market in every year

Assignment Help Financial Management
Reference no: EM131220800

Recall that U.S. mutual fund companies offer about 8000 separate funds. Suppose each fund has a 50-percent chance of beating the S&P 500 each year.

a. Over a 5-year period, how many funds will beat the market in every year? How about a 15-year period?

b. Based on the performance of William Miller's mutual fund from 1981 through 2005, would you say Miller is a genius? Explain.

Reference no: EM131220800

Questions Cloud

Who should hold higher fraction of his wealth in stock : Suppose two people are the same age and have the same level of wealth. -Who should hold a higher fraction of his or her wealth in stock? Explain.
Develop five medical staff by-laws based on the information : Develop five Medical Staff By-laws based on the information in the Medicare's Conditions of Participation. An explanation for EACH by-law. Why it is important? How does it meet Medicare's Conditions of Participation?
Equivalent value of the payment stream : A payment stream consists of $1100 payable today and $1900 payable in six months. What is the equivalent value of the payment stream two months from now if money is worth 8.5%?
Can you explain given deviation from market efficiency : Can you explain this deviation from market efficiency? - Would you guess that small stocks have done better than large stocks since 1980? Why or why not?
How many funds will beat the market in every year : Over a 5-year period, how many funds will beat the market in every year? - Based on the performance of William Miller's mutual fund from 1981 through 2005, would you say Miller is a genius?
Full settlement of the entire debt : Joseph missed the $1700 payment. What single payment today would you accept as full settlement of the entire debt if money can earn 3.45%?
Discuss the main advantage of such a scheme : An extreme method of spooling, known as staging a tape, is to read the entire contents of a magnetic tape onto disk before using it. Discuss the main advantage of such a scheme
How have hong kong and singapore incorporated private sector : How have Hong Kong and Singapore incorporated private sector growth and international trade in their development strategies? Which of these methods of encouraging growth would you suggest for a developing country?
Explain samuelsons reasoning in your own words : Explain Samuelson's reasoning in your own words. - What does this tell us about Buffett or the efficient markets hypothesis?

Reviews

Write a Review

Financial Management Questions & Answers

  Identified nonrandom variations in medication errors

A hospital has identified nonrandom variations in medication errors. These errors can emanate along a process from prescription orders to delivery to a patient. Draw a flow chart for the medication process. Construct a cause - and - effect diagram sh..

  What rate of return would they be earning

Your folks just called and would like some advice from you. An insurance agent just called them and offered them the opportunity to purchase an annuity for $22,691.00 that will pay them $3,500 per year for 10 years. They don’t have the slightest idea..

  Combined communications is new firm in rapidly growing

Combined Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 21 percent a year for the next 4 years and then decreasing the growth rate to 5 percent per year. The company just paid ..

  Market capitalization rate

Company Z-prime’s earnings and dividends per share are expected to grow by 4% a year. Its growth will stop after year 4. In year 5 and afterward, it will pay out all earnings as dividends. Assume next year’s dividend is $8, the market capitalization ..

  In case of bankruptcy

In case of bankruptcy, who will typically receive the firm's liquidated assets in which order?

  Wall mart has decided to buy a chain store

Wall Mart has decided to buy a chain store in South Africa and now has an exposure to the South African Rand. How should it hedge its short term and long term foreign exchange exposures related to this transaction

  The larger the portion of a firm''s sales that are on credit

the larger the portion of a firm's sales that are on credit, the

  What is the amount of the firms net fixed assets

The Caughlin Company has a long-term debt ratio of .43 and a current ratio of 1.50. Current liabilities are $990, sales are $6,410, profit margin is 9.3 percent, and ROE is 20.4 percent. What is the amount of the firm’s net fixed assets?

  Find the present value under each of rates and periods

Find the present value of $4,000 under each of the following rates and periods.

  Current retirement money is invested to earn interest rate

David's is saving for his retirement and as of today has accumulated the lump sum of $7348. David's goal is to retire at some time in the future (the unknown) with 9 times this amount. Assuming that all of David's current retirement money is invested..

  Manufactures time series photographic equipment

Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently at its target debt−equity ratio of .8. It’s considering building a new $48 million manufacturing facility. This new plant is expected to generate after..

  What was its interest expense

Molteni Motors Inc. recently reported $3.75 million of net income. Its EBIT was $6.75 million, and its tax rate was 40%. What was its interest expense? Round your answer to the nearest dollar. Enter your answer in dollars. For example, an answer of $..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd